- 14 Mar 2022
- ICICIdirect Research
State governments embrace adoption of EVs, CNG vehicles
News: As per media sources, in the annual state budget of West Bengal, the state government has proposed to waive road tax and registration fee on CNG and electric vehicle purchase (2-W, PV) in the state for two years starting FY23. The Maharashtra government on the other hand, in its annual state budget has proposed to set up 5,000 new EV charging stations in the state over next three years amid increased allocation for adoption of EVs by BMC for Mumbai at Rs.1,460 crore for FY23E vs. Rs.416 crore likely spending in FY22.
Views: Road tax typically accounts for ~10% of ex-showroom vehicle price. Hence, waiver of road tax shall reduce the on-road price of vehicles and go a long way in adopting clean mobility in West Bengal. This is a positive development for Maruti Suzuki given the company’s pole position in the CNG space domestically. The Maharashtra government, on the other hand, has been offering attractive incentives for purchase of electric vehicles and with current move to set up charging infrastructure it shall further propel the penetration of electric vehicles in the state. This is a positive development for Tata Motors given its leadership in E-PVs domestically.